ITA Wealth Management

[Please note:  A revised Ten Best Investment Books list will appear at 5:00 a.m. November 9, 2009]

Where does one begin when trying to come up with the top ten investment books?  Here is my list, but be forewarned, this is not a list of books that focus on either fundamental analysis of stocks, nor is it a list of books explaining technical analysis.  In fact, the list below is the antithesis of stock picking.  Instead, my list of the top ten focus on index investing and a passive approach to portfolio management.

1. Four Pillars of Investing – William J. Bernstein
2. Index Funds: The 12-Step Program for the Active Investors – Mark T. Hebner (Available on Line)
3. The Little Book of Common Sense Investing – John C. Bogle
4. All About Asset Allocation – Richard A. Ferri
5. The Intelligent Asset Allocator – William J. Bernstein
6. A Random Walk Down Wall Street – Burton G. Malkiel
7. Asset Allocation – Roger C. Gibson
8. What Wall Street Doesn’t Want You to Know – Larry E. Swedroe
9. Unconventional Success – David F. Swensen
10. The Fundamental Index – Robert D. Arnott etc.

It was not easy to pick which of Bogle’s books to recommend.  His First 50 Years is definitely one to substitute for my number 4. I was not sure I wanted to include Arnott’s book (Number 10) as it advocates actively managed index funds and that philosophy runs counter to the investment strategy laid out in the first nine recommendations.  I figure if you read the first nine, then you can handle number 10.

There are several ways to read these books.  1) Read them from start to finish as one reads most books.  This looks like a daunting task if one is going to commit to reading all ten.  2) An alternative approach is to have, say the first seven or eight on your book shelf and you pick themes to read.  For example, you might check the index of each and read all about asset allocation or rebalancing.  Use them as reference books.  If you take this approach, I highly recommend you read Bernstein’s second book, “Four Pillars” from start to finish so you have a sound base from which to begin developing your portfolio plan and eventually a strategy for portfolio management and tracking.

Make the investment in a number of these books and it will reward you over the course of your investing life.

Lowell Herr

Photograph:  Taken in the main square of Cusco, Peru.

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